Fidelity Flags October and Bitcoin Bottom as ‘Yardstick’ Hits Historic Lows

Bitcoin is nearing a market bottom, according to a key valuation metric called the Yardstick from Fidelity Digital Assets. “BTC’s Yardstick is hovering near historic lows, while several sentiment indicators are approaching capitulation territory,” stated Fidelity in its Q3 Signals Report on Tuesday. However, bitcoin is currently trading around 50% below its all-time high, which is still shallow compared to previous bear market bottoms. October Eyed as Key Cycle Timeframe The Yardstick metric compares bitcoin’s market capitalization to network hashrate via a normalized Z-score, with values below -1 standard deviation indicating undervaluation. It essentially measures whether the asset is trading at a fair price relative to the “energy cost” of its security. Low or negative readings signal undervaluation or cheap bitcoin, while high readings signal overvaluation and expensive BTC. The metric has been firmly in the “undervalued” zone for 83% of the past 92 days. Bitcoin miners have faced increasing pressure as prices have fallen, yet the total hash rate has only fallen around 22% from its peak, “highlighting miner resilience.” “As a result, the Yardstick is currently hovering near his...